“We have an idea for a new product line,” Alicia sounded off. “It’s a logical extension of our core product. We all think it will be a winner.”
“How are you going to fund the startup and who are you going to assign to this new project?” I asked.
“Well, that’s a problem. We are currently under a hiring freeze and while we have a budget for development, actually ramping into production is going to pinch,” she grimaced.
“What are you going to let go of?”
Alicia was a bit surprised. “We hadn’t really discussed shutting anything down.”
“Alicia, the biggest mistake that young companies make is that everything looks like an opportunity. Before long, all their resources are spread thin and their product portfolio is a hodgepodge. They can’t figure out if they are in the shoe business or the construction business.
“To be truly successful, the company has to decide on its focus, and create a discipline around that focus. Especially in times where resources are tight, we have to make sure we have enough staying power. This requires an approach of systematic abandonment. As you adapt to the market, it is important to cut off those projects that are no longer returning value.” -Tom